Sarah Pennells is a personal finance journalist and the face behind SavvyWoman.co.uk. We think she does a great job at explaining financial subjects in a very clear and accessible manner. You can find her column below where she writes about the latest financial news, and helps you get more from your money.
Better holiday protection
Good news if you’re going on holiday this summer and you haven’t got round to booking it! From July 1st, anyone booking a holiday that has several different elements (such as flight, hotel and/or car hire) – from the same website, will get better protection under the law.
For years, people who booked package holidays through tour operators had protection if things went wrong. But up until now, if you booked your flight and hotel through a holiday booking site, you could be on your own if there was a problem. It might feel like a package holiday, but as far as the regulations were concerned, it wasn’t!
The new rules mean that for holidays booked from July 1st, it’s the online website’s responsibility to sort out problems that arise. It also means that you can get your money back or be brought home if a holiday company goes bust.
SAVVY TIP: Watch out! This new protection only applies if you pay for your flight and hotel and/or car hire in one payment. If you pay the companies individually, you’re buying what’s called a ‘linked travel arrangement’ and you aren’t protected in the same way.
Hotel websites criticised
It’s not been a great week for the holiday industry as several hotel booking websites have been told, in no uncertain terms, that they could be breaking the law. The watchdog, the Competition and Markets Authority, has written to several hotel booking sites after it became concerned that they may be ranking hotels according to commission and may be putting consumers under too much pressure to book a hotel quickly.
The hotel booking sites must also be clearer about any hidden charges, and make sure that discounts are based on prices that weren’t just available for a very short time.
Pension freedoms or pension rip off?
It’s been over three years since the so-called pension freedoms were introduced. These new rules allowed people who have a pension ‘pot’ type of pension (rather than a final salary pension) to take money out of it when they retire. Previously most people had to buy an annuity, which converted their pension pot into a monthly income for life.
New research by the financial regulator, the Financial Conduct Authority, shows that some people may be losing out by cashing in their pensions. The research showed that many people didn’t know where their pensions were invested after they retired. Over a third had taken money out of their pension and put it all in savings accounts. The FCA estimated that half of these could be losing out as a result.
When you take money out of your pension, only 25% is tax free and you pay tax on the rest. If you’re taking a large chunk out of your pension, the tax could add up to a lot of money. So for some people, leaving their money in their pension until they need it may be a better option.
The FCA wants people to have a better understanding of their pensions and what they can do when they retire. The plan is that pension companies will send so-called ‘wake up’ packs to people when they reach 50, and then every five years.
Self-employed or worker?
An employment tribunal has ruled that 65 couriers working for the delivery firm Hermes are workers and not self employed. The ruling could have implications for thousands of other couriers at Hermes and for other companies in the so-called ‘gig economy’.
The main benefit of being classed as a worker is that you’re entitled to the National Living Wage if you’re aged 25 or over – currently it’s £7.83 an hour. You’ll also get 28 days’ paid holiday a year if you work full time.
You’re likely to be a worker if you have a contract for the work you do (this doesn’t have to be in writing) and if you have to turn up to work even if you don’t want to. You can be a worker if you’re on a zero-hours contract.
If you think you’re a worker but you’re being treated as self employed, contact your union or the government-funded employment information and conciliation service ACAS.
A million married couples losing out on a tax perk
If you’re married or in a civil partnership you could be missing out on up to £238 a year. Married couples or those in a civil partnership, where one partner is a basic rate taxpayer and the other doesn’t pay tax, can apply for the Marriage Allowance. Government figures show that four million couples qualify for this tax break but, so far, only three million have applied.
The easiest way to apply for it is online at the Gov.uk website. If you haven’t applied for it at all, you can backdate your claim for up to four years, which means you could receive up to £900.